Display mode (Doesn't show in master page preview)

19 Oct 2023

International Economy

China’s economy is expected to grow close to its government’s target of 5 percent in 2023 (Business Brief No.4021 Full Ed.)

  • The Chinese economy saw higher-than-expected growth at 4.9 percent YoY in 3Q23. The country’s economy expanded by 5.2 percent YoY during 9M23. China’s implementation of economic stimulus measures led to increased domestic consumption, boosting its 3Q23 GDP to grow more than expected. Retail sales rose by 5.5 percent in September 2023. Meanwhile, the country’s GDP growth was 5.2 percent YoY during 9M23, driven mainly by the service sector. However, property investment continued to decline, indicating an ongoing downturn in the real estate sector, putting pressure on its economy.
  • For the remaining months of 2023, China’s economy will still face several significant risks, including: 1) Pressure from the property sector: A decline in home sales would be a key factor affecting the liquidity of real estate developers – this issue needs further monitoring; 2) Lower domestic spending compared to pre-pandemic levels: Consumer confidence remains under pressure from the property sector slowdown; 3) Geopolitical issue: China may face the indirect effect of rising oil prices, though it has only limited trade ties with Israel. However, the Chinese economy might not see any significant impact if the Israel-Hamas conflict does not escalate from its current level.
  • Despite numerous risks, China’s economy is set to reach its growth target of 5 percent as the Chinese government is expected to implement additional economic measures. Close attention should be paid to the Third Plenum of the 20th Central Committee of the Communist Party of China slated for the end of October 2023 as the Chinese authorities are expected to raise its budget deficit target for year 2023.

View full article

International Economy